Hundreds of people lose their jobs as Northumberland firm Merit goes into administration
Hundreds of people have lost their jobs as a result of a construction company going into administration.
It has been announced that James Lumb and Will Wright from Interpath were appointed joint administrators to Merit Group Services Limited and Merit Health Limited and Merit Holdings Limited (together, ‘Merit’) on November 17 and November 18 respectively.
The Cramlington-based firm had previously said that a petition to wind up being launched by HM Revenue and Customs (HMRC) led to “significant additional pressure” on its cashflow following the difficulties caused by contractual issues and delays to a number of its major contracts.
Merit has worked with customers across the healthcare, life science, education, battery technology and aerospace industries.
The announcement said the directors sought to undertake a thorough exploration of their options – including options for sale, refinancing and investment. However, when it became clear that a solvent solution could not be found, they took the “difficult decision” to seek the appointment of administrators.
It goes on to say that the companies “have now ceased operations and as such, and with regret, the joint administrators have made the majority of Merit’s circa 340 member employees redundant”.
Merit Holdings was the construction partner for Northumbria Healthcare NHS Foundation Trust on its new £35million Berwick Community Hospital and the medicines manufacturing unit project at Seaton Delaval.
Some of the units for the new hospital, which is still to be completed, were manufactured in Merit’s Cramlington facility and then subsequently transported to the Berwick site for installation.
Mr Lumb, managing director at Interpath and joint administrator, said: “The UK construction industry continues to face tremendous headwinds – with rising costs, high interest rates and subdued private sector demand having an impact on larger contracts in particular.
“Although Merit has developed an outstanding reputation for the quality and innovation of its specialist offsite solutions, these broader challenges proved to be insurmountable.”
He added: “We continue to explore options in order to find a solution that works for Merit’s customers, employees and creditors.
“In the meantime, we are prioritising providing support to all those who have been affected by redundancy, including supporting them with claims to the Redundancy Payments Service.”